Consumer morale hits two-year low

According to GfK NOP consumer confidence index consumer morale deteriorated in April to the worst since the country was in the grip of recession, as people braced to take a hit from public spending cuts.

April has seen decreases across all five measures; public perception of the country’s general economic situation over the last 12 months and over the next 12 months, confidence in their own personal financial situation over the last 12 months and over the next 12 months, and the major purchases index.

“Coming after six months of stagnant economic growth, this is a significant drop, one that is bad news for the government and bad news for the economy,” Nick Moon, MD of GfK NOP Social Research, said.

“It suggests that the attempts to spur growth in last month’s Budget have failed to convince the public, and this may well be sorely felt on the already beleaguered high street.”

By the end of the month the Consumer Confidence Index had dropped three points to -31, fifteen points lower than this time last year.

“More importantly, in sinking below the -30 figure, consumer confidence has entered a worrying area. In the 37 years the Index has been running, there have been only two occasions when this figure has been breached — early 1990 and mid-2008,” Moon added.

“It is particularly striking that all five areas of the Index fell this month, pointing towards growing gloom as we head into summer. These figures must make the possibility of a double dip recession increasingly real.”